Korea : The technical situation weakens (KRW) – 11/08/17

We integrate the KRW Lyxor ETF into our Watchlist (short), while the technical situation weaken under geopolitical tensions. We should be very careful on the technical signals of the next few days, as the evolution of this ETF should be more than ever "event driven".

This index is highly correlated with Samsung which weighs about 30% of its market capitalization. Moreover, the risk of conflict with North Korea is worsening, which justifies a higher risk premium. The cost of this ETF is 0.65% for an outstanding amount of € 116 million.

The weekly chart shows a bearish start, with prices that have already broken out the EMA 13 & 26 and which form a dangerous top structure. The monthly chart remains bullish for now, which shows that it is still so far a correction in a bull market. Given the nature of the problem that will not be solved in the short term, it is likely that the correction will deepen and reach the weekly EMA100 at about $48.

KRW : monthly data

KRW : weekly data